IDEAS home Printed from https://ideas.repec.org/a/spr/comaot/v7y2001i3d10.1023_a1011986519310.html
   My bibliography  Save this article

Promotion Systems and Organizational Performance: A Contingency Model

Author

Listed:
  • Steven E. Phelan
  • Zhiang Lin

Abstract

This study explores the organizational impact of a variety of important promotion systems commonly practiced in organizations including up-or-out systems, absolute merit-based systems, relative merit-based systems, and seniority-based systems. Through the computer simulation of organizations in a distributed decision making setting, the results indicate that the effectiveness of any promotion system is dependent on a range of factors including the nature of the task environment, the design of the organizational structure, the frequency of monitoring, the criteria of performance, and the transferability of task knowledge. This study has implications not only for understanding organizational promotion systems from the contingency perspective, but also for bridging the fields of strategic human resource management and computational organization theory.

Suggested Citation

  • Steven E. Phelan & Zhiang Lin, 2001. "Promotion Systems and Organizational Performance: A Contingency Model," Computational and Mathematical Organization Theory, Springer, vol. 7(3), pages 207-232, October.
    • Handle: RePEc:spr:comaot:v:7:y:2001:i:3:d:10.1023_a:1011986519310
    DOI: 10.1023/A:1011986519310
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1023/A:1011986519310
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1023/A:1011986519310?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. repec:bla:jfinan:v:43:y:1988:i:3:p:593-616 is not listed on IDEAS
    3. Hall, Robert E, 1988. "Fluctuations in Equilibrium Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 269-275, May.
    4. Robert Gibbons & Michael Waldman, 1999. "A Theory of Wage and Promotion Dynamics Inside Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1321-1358.
    5. Baker, G.P. & Jensen, M.C. & Murphy, K.J., 1988. "Compensation And Incentives: Practice Vs. Theory," Papers 88-05, Rochester, Business - Managerial Economics Research Center.
    6. Baker, George & Holmstrom, Bengt, 1995. "Internal Labor Markets: Too Many Theories, Too Few Facts," American Economic Review, American Economic Association, vol. 85(2), pages 255-259, May.
    7. O'Flaherty, Brendan & Siow, Aloysius, 1995. "Up-or-Out Rules in the Market for Lawyers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 709-735, October.
    8. Chan, William, 1996. "External Recruitment versus Internal Promotion," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 555-570, October.
    9. Waldman, Michael, 1990. "Up-or-Out Contracts: A Signaling Perspective," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 230-250, April.
    10. Aloysius Siow, 1995. "The Organization of the Market for Professors," Working Papers siow-95-01, University of Toronto, Department of Economics.
    11. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 881-919.
    12. Pertti H. Lounamaa & James G. March, 1987. "Adaptive Coordination of a Learning Team," Management Science, INFORMS, vol. 33(1), pages 107-123, January.
    13. Natalie S. Glance & Tad Hogg & Bernardo A. Huberman, 1997. "Training and Turnover in the Evolution of Organizations," Organization Science, INFORMS, vol. 8(1), pages 84-96, February.
    14. Zhiang Lin & Chun Hui, 1999. "Should Lean Replace Mass Organization Systems? A Comparative Examination from a Management Coordination Perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(1), pages 45-79, March.
    15. Landers, Renee M & Rebitzer, James B & Taylor, Lowell J, 1996. "Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms," American Economic Review, American Economic Association, vol. 86(3), pages 329-348, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chris P. Long & Richard M. Burton & Laura B. Cardinal, 2002. "Three Controls are Better than One: A Computational Model of Complex Control Systems," Computational and Mathematical Organization Theory, Springer, vol. 8(3), pages 197-220, October.
    2. Th'eo Durandard, 2023. "Dynamic delegation in promotion contests," Papers 2308.05668, arXiv.org.
    3. Jisung Kim & Richard M. Burton, 2002. "The Effect of Task Uncertainty and Decentralization on Project Team Performance," Computational and Mathematical Organization Theory, Springer, vol. 8(4), pages 365-384, December.
    4. Shih-Hsien Tseng & Hsiu-Chuan Chen & Tien Son Nguyen, 2022. "Key Success Factors of Sustainable Organization for Traditional Manufacturing Industries: A Case Study in Taiwan," Mathematics, MDPI, vol. 10(22), pages 1-17, November.
    5. Pluchino, Alessandro & Rapisarda, Andrea & Garofalo, Cesare, 2011. "Efficient promotion strategies in hierarchical organizations," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(20), pages 3496-3511.
    6. Cheng, Yuan & Chang, Meng & Xue, Yanbo, 2020. "A computational study of promotion dynamics and organizational efficiency," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 560(C).
    7. Соколов М. М., 2019. "Трансформирующие И Селективные Системы: Исследование По Сравнительной Социологии Академических Рынков И Карьер," Вопросы образования // Educational Studies Moscow, National Research University Higher School of Economics, issue 2, pages 35-77.
    8. Phong Nguyen & Chuong Dang & Lam Nguyen, 2015. "Would Better Earning, Work Environment, and Promotion Opportunities Increase Employee Performance? An Investigation in State and Other Sectors in Vietnam," Public Organization Review, Springer, vol. 15(4), pages 565-579, December.
    9. Udhayanan, Prateksha & Mishra, Swasti S. & Rao, Shrisha, 2021. "Firm dynamics and employee performance management in duopoly markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 583(C).
    10. Mikhail Sokolov, 2019. "Transformative and Selective Systems: A Study in Comparative Sociology of Academic Markets Careers," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 2, pages 35-77.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    2. Carr, Michael D., 2011. "Work hours and wage inequality: Evidence from the 2004 WERS," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 417-427, August.
    3. Waldman, Michael, 2013. "Classic promotion tournaments versus market-based tournaments," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 198-210.
    4. C. Sofia Machado & Miguel Portela, 2011. "Age and opportunities for promotion," NIPE Working Papers 03/2011, NIPE - Universidade do Minho.
    5. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    6. Suman Ghosh & Michael Waldman, 2010. "Standard promotion practices versus up‐or‐out contracts," RAND Journal of Economics, RAND Corporation, vol. 41(2), pages 301-325, June.
    7. Melero Martín, Eduardo, 2004. "Evidence on Training and Career Paths: Human Capital, Information and Incentives," IZA Discussion Papers 1377, Institute of Labor Economics (IZA).
    8. Jed DeVaro & Antti Kauhanen & Nelli Valmari, 2019. "Internal and External Hiring," ILR Review, Cornell University, ILR School, vol. 72(4), pages 981-1008, August.
    9. C. Edward Fee, 2006. "Promotions in the Internal and External Labor Market: Evidence from Professional Football Coaching Careers," The Journal of Business, University of Chicago Press, vol. 79(2), pages 821-850, March.
    10. Kiyotaki, Fumi, 2004. "The effects of a consolation match on the promotion tournament," Journal of the Japanese and International Economies, Elsevier, vol. 18(2), pages 264-281, June.
    11. Oyer, Paul & Schaefer, Scott, 2011. "Personnel Economics: Hiring and Incentives," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 20, pages 1769-1823, Elsevier.
    12. Patrick Kampkoetter, 2012. "Determinants of Compensation in the Financial Services Industry," Cologne Graduate School Working Paper Series 03-12, Cologne Graduate School in Management, Economics and Social Sciences.
    13. Cassidy, Hugh & DeVaro, Jed & Kauhanen, Antti, 2016. "Promotion signaling, gender, and turnover: New theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 140-166.
    14. Waldman, Michael, 1996. "Asymmetric learning and the wage/productivity relationship," Journal of Economic Behavior & Organization, Elsevier, vol. 31(3), pages 419-429, December.
    15. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    16. Jed DeVaro & Suman Ghosh & Cindy Zoghi, 2018. "Job Characteristics and Labor Market Discrimination in Promotions," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 57(3), pages 389-434, July.
    17. Robert Gibbons & Michael Waldman, 2006. "Enriching a Theory of Wage and Promotion Dynamics inside Firms," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 59-108, January.
    18. Ján Zábojník, 2012. "Promotion tournaments in market equilibrium," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(1), pages 213-240, September.
    19. Th'eo Durandard, 2023. "Dynamic delegation in promotion contests," Papers 2308.05668, arXiv.org.
    20. José Ángel Zúñiga Vicente & José David Vicente Lorente, 2003. "Assessing the Structural Change of Strategic Mobility Determinants Under Hypercompetitive Environments," Working Papers 0302, Departament Empresa, Universitat Autònoma de Barcelona, revised Feb 2003.
    21. Alberto Bayo-Moriones & Pedro Ortín-Ángel, 2003. "Internal Promotion Versus External Recruitment: Evidence in Industrial Plants," Working Papers 0303, Departament Empresa, Universitat Autònoma de Barcelona, revised Mar 2003.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:comaot:v:7:y:2001:i:3:d:10.1023_a:1011986519310. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.